Generally, you get what you pay for. And that may well be the core catalyst for these cheap stocks to buy under $50. Yes, when you throw around the word “cheap,” you’re probably thinking about single digits if not even sub-single digits. However, raising your crosshairs to the $50 level carries significant advantages.
Essentially, you will be targeting middle-capitalization companies. Ideas that stem from this category can be incredibly attractive because of their balanced profile. They’re not large-cap players so there’s plenty of room to run higher. At the same time, they’re also fairly established businesses so you don’t have to fret anxiously about forward viability.
For many, this space hits the sweet spot. On that note, below are (relatively) cheap stocks to buy.
Tower Semiconductor (TSEM)
Based in Israel, Tower Semiconductor (NASDAQ:TSEM) falls under the namesake category (obviously). Per its public profile, Tower is an independent computer chip foundry. It focuses on specialty process technologies to manufacture analog-intensive mixed-signal semiconductor devices in Israel, the U.S., Japan, Europe and other international markets. In addition to its core business, it also provides design enablement platforms for quick and accurate design cycles.
Thanks to wide-ranging relevancies, Wall Street analysts rate TSEM a unanimous strong buy. Further, the average price target comes in at $46.33, implying 26% upside potential. Generally speaking, Tower’s financial performance is consistent. Even with a miss in the second quarter of last year, the average positive earnings surprise in the past four quarters came out to 5.88%.
For fiscal 2024, covering experts anticipate a modest slowdown. However, one year later, they’re looking for earnings per share of $2.28 on revenue of $1.57 billion. In 2023, the company posted earnings of $2.22 per share on sales of $1.42 billion. For patient investors, TSEM could be one of the cheap stocks to buy.
PowerSchool (PWSC)
Operating in the technology field, PowerSchool (NYSE:PWSC) works in the application software category. Per its corporate profile, PowerSchool with its subsidiaries offers cloud-based software to the K-12 education market in the U.S., Canada and other international markets. Its solutions are embedded in school workflows, enabling easy daily use by educators, students, administrators and parents in schools and districts.
Cynically, PWSC could be an intriguing idea for cheap stocks to buy because of the Covid-19 disruption. Even before the crisis, American students were falling behind internationally. However, the pandemic imposed devastating impacts on the learning cycle. In other words, the U.S. and arguably other western nations have much catching up to do.
Even better, for fiscal 2024, analysts anticipate that EPS will land at 92 cents on revenue of $789.42 million. That’s a big improvement over last year’s results of 82 cents EPS on sales of $697.65 million. Further, the top line could expand to $827.72 million in fiscal 2025. Fundamentally, the narrative makes sense, making PWSC one of the cheap stocks to buy.
TAL Education (TAL)
Let’s dial up the cynicism factor with TAL Education (NYSE:TAL). Falling under the consumer defensive space, TAL operates in the education and training services sector. According to its corporate profile, TAL provides K-12 after-school tutoring services in China. The tutoring covers various academic subjects, including maths and sciences as well as broader areas such as political science and English.
Frankly, Chinese culture places great importance on education. It’s a means to rise in social value as well as monetarily. So, TAL should rise in demand for the long run. Also, you must factor in the geopolitics. With China obviously competing head-to-head with the U.S. in many areas, the focus on education will be paramount. While the company’s financial performance has been patchy, when it delivers, it delivers big.
For the current fiscal year, analysts believe EPS will rise to 25 cents on sales of $2.03 billion. That’s a gargantuan leap from last year’s results of earnings of 14 cents per share on revenue of $1.5 billion. What’s more, the top line in the following fiscal year could hit $2.6 billion. It’s easily one of the cheap stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
